Tuesday, November 5, 2013
Atlantic Express files for bankruptcy, may seek sale
Nov 4 (Reuters) - Atlantic Express Transportation Corp filed for Chapter 11 bankruptcy protection late on Monday, a court filing showed, as the school bus operator faces a union battle, weak earnings, and cash shortage.
Atlantic Express said it expects to use the Chapter 11 process to tap additional debt or equity financing, market its assets for sale and negotiate a new labor agreement with the union Local 1181-1061, Amalgamated Transit Union, AFL-CIO.
"Our current business model in our largest market, New York City, is not sustainable as union labor costs and operating expenses have severely hindered our ability to remain competitive and meet our financial obligations," Chief Executive David Carpenter said in a statement.
The company has also filed a motion seeking authorization to sell some or all of its assets in December if it is unable to reach an agreement with Local 1181 on a new labor contract and obtain additional financing.
New York-based Atlantic Express listed out estimated liabilities and assets of $100 million to $500 million.
Atlantic Express, founded in 1964 with 16 vans, operates a fleet that ranges from sedans and wagons to a variety of school buses and luxury coaches.
Two funds of Wayzata Investment Partners, a private equity firm that specializes in purchasing distressed companies and assets, own about 63 percent of Atlantic Express, according to the filing.
Besides the company, 39 of its affiliates also concurrently filed for bankruptcy protection.
The case is Atlantic Express Transportation Corp, Case No. 13-13598, U.S. Bankruptcy Court, Southern District of New York.